That’s right: as a condition to closing the Opel/Vauxhall sale, GM agreed to fund certain European Opel/Vauxhall pension obligations in the amount of €3.0 billion. At the time GM and PSA announced the Opel deal, it wasn’t clear how GM will deal with the obligation… but it is now.

According to a statement from the company, GM will fulfill the Opel/Vauxhall pension obligation by issuing unsecured notes (in other words, a loan) in the amount of $3 billion USD.

Update: we now have the details of the GM unsecured notes that the company will use to meet its Opel pension obligations.

The level of management incompetence is mind boggling. All the while management is patting themselves on the back and giving out bonuses. Market share keeps falling. Without Chevrolet trucks GM has become largely irrelevant.

In the comment to the above linked article in this group, I told of the “Opel Automobile GmbH” which was a 100% subsidiary of “Adam Opel GmbH”. With a recent increase in capital of “Opel Automobile GmbH” by 100 Euro from 25,000 Euro to 25,100 Euro, owner Adam Opel GmbH transferrred all of the Opel/Vauxhall automobile business to the “Opel Automobile GmbH”.

This “Opel Automobile GmbH” is what is actually being sold to PSA, while the historic “Adam Opel GmbH” with its more than 100 years of history remains in GM ownership. It has no other business than to pay the Opel pensions to the former Opel employees, until the last one of those dies…

To be clear, the pensions to pay by the “Adam Opel GmbH” are not the full pension a worker is entitled to, but only the additional company pension.

Germany has a public pension system since Bismarck times (Bismarck hoped to disenfranchise the working class from the socialist party) managed by a public authority. So this pension system is completely independent from the individual companies a worker may have worked for during his lifetime.

But many richer companies offer an additional pension, which is also publicly regulated but under the responsibility and management of the individual company. This is called in German the “Betriebsrente” (Rente = pension; Betrieb = company or workplace).

My “Betriebsrente” which is due to me from a US-american computer company is not being increased despite inflation: my former employer sent me a letter telling me that the dire financial situation of that company does not allow an increase in the “Betriebsrente”.

Let’s hope that the former Opel workers don’t have to confront a similar situation with their GM pensions.